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Released August 16, 2019 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Estimated operating margins for corn-based fuel ethanol plants in the U.S. Midwest plunged to an average of 3.5 cents per gallon in the first half of 2019, then to nearly zero in July, according to the U.S. Energy Information Administration (EIA). Rising ethanol production and falling domestic demand were cited by the EIA as the major reasons, resulting in higher ethanol inventory levels. Industrial Info is tracking more than $1.8 billion worth of active ethanol-production projects in the U.S., with the Midwest region accounting for about 40%.
Click on the image at right for a graph detailing the top 10 U.S. states for active ethanol-production projects, by investment value.
Ironically, the problem of oversupply is partly a result of one of the U.S. ethanol industry's most notable accomplishments in the past couple of decades: technological and industrial improvements in corn ethanol production, with producers now yielding, on average, about 2.8 gallons of ethanol for every bushel of corn, according to the EIA. But the resulting drop in ethanol prices has not been matched by corn prices, which hit a five-year high earlier this summer amid heavy flooding in the Midwest region, devastating many corn-producing farms and slowing harvests.
How this trend will affect active ethanol-production projects in the U.S. has yet to be seen. At least two projects on opposite ends of the "Corn Belt" are under construction: Red River BioRefinery LLC's (Middleton, Wisconsin) $30 million advanced fuel ethanol plant in Grand Forks, North Dakota, and Mercuria Energy Trading's (Geneva, Switzerland) $30 million ethanol plant expansion in South Bend, Indiana.
Mercuria plans to increase its production capacity from 65 million to 100 million gallons per year, but Red River is exploring alternative methods to producing ethanol: Its facility is using sugar beet tailings and wasted wheat straw and potatoes to produce 8 million gallons per year of ethanol, as well as 30,000 tons per year of distillers solids. For more information, see Industrial Info's reports on the Red River and Mercuria projects.
Several proposed ethanol-production projects in other parts of the U.S. point to a growing interest in non-corn feedstock:
In addition to the above-mentioned capital projects, Industrial Info is tracking more than 370 maintenance-related projects at ethanol-production facilities across the U.S., including more than 160 that are set to begin within the coming 12 months. Click here for a list.
Ethanol and corn producers also are concerned about the U.S. Environmental Protection Agency's (EPA) recent decision to grant "economic hardship" wavers to 31 small U.S. refineries. These refiners say that obligations under the Renewable Fuel Standard (RFS) to use ethanol and other biofuels in their gasoline (or purchase credits from others that do) creates economic difficulties. Many trade group affiliated with ethanol and corn producers say this could further hurt ethanol demand, while refiners disagree.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Click on the image at right for a graph detailing the top 10 U.S. states for active ethanol-production projects, by investment value.Ironically, the problem of oversupply is partly a result of one of the U.S. ethanol industry's most notable accomplishments in the past couple of decades: technological and industrial improvements in corn ethanol production, with producers now yielding, on average, about 2.8 gallons of ethanol for every bushel of corn, according to the EIA. But the resulting drop in ethanol prices has not been matched by corn prices, which hit a five-year high earlier this summer amid heavy flooding in the Midwest region, devastating many corn-producing farms and slowing harvests.
How this trend will affect active ethanol-production projects in the U.S. has yet to be seen. At least two projects on opposite ends of the "Corn Belt" are under construction: Red River BioRefinery LLC's (Middleton, Wisconsin) $30 million advanced fuel ethanol plant in Grand Forks, North Dakota, and Mercuria Energy Trading's (Geneva, Switzerland) $30 million ethanol plant expansion in South Bend, Indiana.
Mercuria plans to increase its production capacity from 65 million to 100 million gallons per year, but Red River is exploring alternative methods to producing ethanol: Its facility is using sugar beet tailings and wasted wheat straw and potatoes to produce 8 million gallons per year of ethanol, as well as 30,000 tons per year of distillers solids. For more information, see Industrial Info's reports on the Red River and Mercuria projects.
Several proposed ethanol-production projects in other parts of the U.S. point to a growing interest in non-corn feedstock:
- Enerkem Incorporated (Montreal, Quebec) is considering a waste-to-ethanol plant in Rosemount, Minnesota, which would process 400,000 tons per year of municipal solid waste into 20 million to 40 million gallons per year of advanced biofuels; see project report
- Ensyn Technologies Incorporated (Ottawa, Ontario) is reviewing the proposed conversion of a particle board mill into a cellulosic biofuels mill in Vienna, Georgia, which would process 440 tons per day of wood biomass into 20 million gallons per year of renewable fuel oil; see project report
- Biofuels & Energy LLC (San Diego, California) is evaluating a proposed ethanol bio-refining plant in Center, Colorado, which would produce about 500,000 gallons per year from various food wastes and surplus; see project report
In addition to the above-mentioned capital projects, Industrial Info is tracking more than 370 maintenance-related projects at ethanol-production facilities across the U.S., including more than 160 that are set to begin within the coming 12 months. Click here for a list.
Ethanol and corn producers also are concerned about the U.S. Environmental Protection Agency's (EPA) recent decision to grant "economic hardship" wavers to 31 small U.S. refineries. These refiners say that obligations under the Renewable Fuel Standard (RFS) to use ethanol and other biofuels in their gasoline (or purchase credits from others that do) creates economic difficulties. Many trade group affiliated with ethanol and corn producers say this could further hurt ethanol demand, while refiners disagree.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
